Centralization & Decentralization
Centralization is characterized by decision making being undertaken at the top levels, while actual work is carried out at the lower levels. Decentralization refers to the systematic devolution (transference of power) of responsibility and authority within the structure of an organization.
By centralization or decentralization it does not mean the division of organization into departments or sections.
It is where decisions are made that determines the degree of centralization, and it is quite possible for an organisation to have many divisions, all of which are strictly controlled from a single central source of authority.
Organisations cannot be totally centralized or decentralized.
Usually with complete centralization no-one other than a small group of senior managers could make any decisions – the results would be that the organization would be paralyzed and unable to function.
What are the Advantages of Centralization?
1. Central authority ensures corporate integrity to the organization and preventing excessive departmentalism. 2. Senior management needs to be seen as providing leadership for the organization as a whole, ensuring that the various parts perform as a team within corporate objectives. 3. In the event of disputes between departments or division, or between departments and the corporate whole, central authority takes on the role of referee in the resolution of conflict. 4. Centralized authority is necessary for the making of corporate policy and determining strategic plans across the whole organization. 5. It also fulfills other functions such as standardizing procedure and approaches which are defining and promoting a unity and style and purpose in respect of issue and practices across the organization such as equal responsibilities practice. 6. It also fulfills the purposes of crisis management which is the determination of action which can be effective across the whole organization...
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